In This Edition... New Trade Alerts: Frontline (FRO), Canadian Pacific Railway (CP)  Review of Open Trades: GenVec (GNVC), RealNetworks (RNWK)  Trades to Bail On (if you haven't already) New Trade Alerts I'm pretty excited about today's two new picks, as I'm taking a stance I don't usually take... a long-term one. Most of my recent picks have been short-term calls, based on charts. Frontline Ltd. (FRO) and Canadian Pacific Railway Limited (CP), however, are intended to be longer-term holdings... both of them bullish/long.  Certainly charts played a role in the selection process, but the fundamentals - I think - should drive these stocks upward to very large gains over the next few months, if not years. So, here's a complete look at Canadian Pacific Railway Limited and Frontline Ltd. (and yes, it's only a coincidence that both are transportation stocks).  Canadian Pacific Railway Limited (CP)  I know this is probably the last thing you thought you'd ever see in the Small Cap Network newsletter as a stock pick, and I'd be the first to admit it's not our usual fare. Value is value though, and right now, Canadian Pacific Railway shares are a value.  Bottom line, Canadian Pacific Railway has been making money. They make money in good times and bad (and with or without a fuel surcharge). Both the top and bottom line tapered off in 2008, and in the first half of 2009, reflecting a steep decline in rail shipping traffic. Yet, the trailing P/E of 14.1 and the forward-looking P/E of 16.6 still reflect a tangible, revenue-bearing operation at a reasonable price. Moreover, CP has been in the habit of topping earnings estimates.  Since May, Canadian carload and intermodal traffic has exploded, moving from an average of 94,000 cars per week to 113,000 per week. That's only a 20% increase, but by rail traffic standards it's enormous. It's also the biggest May/October differential on record.  I'm going to take the hint at face value and say 2010 is primed to be a huge year for railroads in general, and Canadian Pacific Railway Limited in particular. Will it match 2007's levels? I don't know. I do know the market has only priced in a 30% increase in earnings for next year, and only a 6.6% increase in revenue. And, as I said, the rail carrier has been beating forecasts consistently. I believe the true potential of CP is underestimated here, particularly if oil prices linger above $70.  Frontline Ltd. (FRO) Frontline Ltd. is another undervalued, unrecognized recovery play. Last quarter's results weren't as strong as hoped, nor were they as strong as they had been in the quarters immediately before Q3. In fact, Frontline swung to a loss. Net positive earnings are expected again this quarter and next year, however, of $0.08 and $1.12, respectively.  Is Frontline Ltd. a global recovery bet? At least to some extent, yes. It is the world's biggest independent oil tanker shipping group, and as such, is perfectly-positioned to capitalize on an economic rebound. Not that unemployment's dip to 10% last month is total evidence that things are getting better, but it's another layer of a mounting pile of evidence to that end. FRO would be one of those high-payoff (and stealthy) ways to play a recovery, since there's lots of room for the stock to rebound. With that said....  The chart of Frontline is compelling beyond measure. I've talked about this shape before, but it bears repeating now - these bowl-shaped recovery moves that take a long time to get rolling have outstanding odds of follow-through. Moreover, FRO is visibly accelerating now, and hit multi-month highs today.    Review of Open Trades I don't have time or space to touch all our open trades, but there are a few details worth mentioning.  GenVec Inc. (GNVC) - I was right... the volatility has been beneficial to us, but dizzying at the same time. After getting in at $0.89 and going nowhere for a while, GenVec finally launched from $0.85 to a peak of $1.16 in late November. Then (surprise surprise) GNVC pulled back to a low of $0.93, only to reach $1.18 two days later. Now GenVec is back to $0.99 - all over the map.  I know this is frustrating, but that's just the nature of low-priced stocks. We're up about 10% in a month and a half, but more importantly, the volatility is working for us. I still see this one as worth trouble, as it could double from here in a matter of weeks. (Or, it could be cut in half - that's the game.)  RealNetworks Inc. (RNWK) - No worries about the big pullback we've seen from RealNetworks since mid-October. I warned that the runup was excessive, and such a move was on the way. Well, here it is.  As it stands now, it looks like the head-and-shoulderish reversal pattern will be complete right around the $3.00 level, which also happens to be where RNWK is going to encounter the support line that prompted this trade in the first place... the one that goes back to April. As long as that line holds, I expect RealNetworks to resume the original uptrend. (And, given that the selling volume has been minimal, that shouldn't be a problem.)  Valassis Communications Inc. (VCI) - Valassis is now under an elevated level of scrutiny. This short trade got off to a great start, moving from out entry at $16.33 to a low of $14.32 in a matter of days. This week, however, VCI not only rebounded, but popped back above the resistance line that initially prompted this trade.  The volume behind the gains was anemic, so I don't see it as a problem yet. In fact, I expect to see the sellers take over again and pull Valassis back under support at $16.58 by next week. If that doesn't happen though, there's no need to be stubborn. Stay tuned.  EDAP TMS SA (EDAP) - Our EDAP short position continues to progress nicely. Every few days it retests a falling resistance line, and when it fails to hurdle it, the stock makes another leg lower. In fact, EDAP is in the midst of such a retest today; I expect the next few days to send shares on to new multi-week lows. As of now, we're up 18%.    Trades to Bail On (if you haven't already) Most of these picks would have already been carved out of your portfolio anyway, if you're following strict rules regarding trailing stops (like a parabolic SAR trigger). If not, however, let's make sure these names are cleaned out. In some cases they may mean a loss, which isn't a bad thing - you can offset you're taxable gains for the year at the same time you free up some capital for more productive ideas. Flotek Industries (FTK) - We're just getting no traction here, and the stock's moving to new lows now. Though the value is still out there, it's not helping the stock any. Let's go ahead and dump it.  WebMD Health Corp. (WBMD) - I thought I officially made an exit on WBMD when it moved to the $36.00 area on November 11th after the tender offer of $37.00, but I didn't. So, since it's not going to go anywhere anytime soon, let's go ahead and lock in the 25% gain by selling your WebMD at the market.  Management Energy Inc. (MMEX) - You may recall this one was originally MGMT Energy, Inc. (MGEG). A stock split and name change in the meantime, however, changed things up. Either way, our cost basis was changed to $0.78, and MMEX peaked around $1.57, or a 100% gain. Even when things started to crumble in October though, you could have still escaped with gains around 60% at the point where trailing stops would have been triggered. If you're still in now, go ahead and sell it today.    From the Community Break-Out Performers: ENTG, GIII, KNXA Gold Looking Toppy - Time to Think Small (GLD, GDX, HMY, NG) Chart Outlooks: CTIC, SEED, HESG SIGA: Thursday's Drop Was Just A Tree Shake Anticipating Friday's Trading Action (OTC:MCLN)